Riot-hit Chile presses forward with social reforms

Riot-hit Chile presses forward with social reforms
By Dave Sherwood

SANTIAGO (Reuters) – Chile’s president and lawmakers prepared on Thursday to push forward social equality reforms after the easing of riots in the latest flashpoint of protests against South American leaders.

Center-right leader Sebastian Pinera was to ship a bill to Congress that would overturn a recent hike in electricity rates, one of several measures he hopes will turn the violent demonstrations into an “opportunity” for Chile..

Ecuador’s President Lenin Moreno also repealed the elimination of fuel subsidies this month after protests, while Bolivia’s Evo Morales faced demonstrations over an election, and Argentina’s Mauricio Macri has suffered a backlash over economic turmoil.

In Chile, anger over inequality and cost of living sent tens of thousands into the streets to demand an overhaul in one of the region’s traditionally most stable, and wealthy, nations.

Over five days of unrest that appeared to be dying down on Wednesday night, more than 6,000 people have been detained and at least 16 killed.

Pinera’s proposed reforms include a guaranteed minimum wage, a hike in state pensions and reductions in public transportation costs. Some, such as a bill to provide insurance against catastrophic illness, have already been delivered to lawmakers.

Octavio Solis, 43, an unemployed security guard, said he hoped the government acted quickly.

“We’re tired of all this, the protests, the looting. It’s a disaster. This isn’t the Santiago we once knew,” Solis said as he waited in line to receive an unemployment payment.

“We need good salaries and pensions for our elderly.

CITY LIFE

The capital city of about 6 million people awoke to relative calm on Thursday, as vendors peddling orange juice and fruit cups once again appeared on street corners.

Public markets reopened and thousands of commuters, dressed in work outfits and clutching coffees, made their way to work on the still hobbled underground transport system that has suffered more than $300 million worth of damage.

Trash, broken glass, graffiti and tear gas lingered in the aftermath of protests that went late into Wednesday evening, but ended peacefully.

Thousands of striking workers, including healthcare professionals and teachers, banged pots and carried banners past darkness in Santiago and other cities.

The marches were closely monitored by police and soldiers.

The unrest has included arson attacks and looting. At least 18 people died, according to one official count. Chilean prosecutors have since clarified that two of the total died in a car accident unrelated to the riots.

(Reporting by Dave Sherwood; Editing by Andrew Cawthorne)

Powerhouse U.S. cities home to worst wage inequality

Powerhouse U.S. cities home to worst wage inequality
By Jonnelle Marte

(Reuters) – Wage inequality has soared in many of the United States’ biggest cities over the past 35 years as companies cluster in urban centers, driving big paychecks for in-demand workers, according to a report by the New York Federal Reserve

At the same time, a broad swath of Americans in the very same cities is being left behind, with wage increases for low- to middle-wage employees failing to keep pace with the dramatic gains by high-end workers.

Cities such as New York, Houston and San Francisco have moved to near the top of the rankings in recent years in terms of wage inequality, the report by economists Jaison Abel and Richard Deitz released on Monday found.

In San Francisco, inflation-adjusted wages for workers in the top 5% of wage earners grew by 120% between 1980 and 2015, while wages for the bottom 10% of earners grew by just 20%.

In New York City, wages grew by 110% for the top 5% of workers, but just 15% for the bottom 10%, according to the report.

Economic inequality has been rising across the United States as globalization and automation eliminate some middle-income jobs and highly skilled workers in technology, finance and other sectors win higher wage premiums.

The changes are making city life more challenging for lower wage workers, who are struggling to keep up with rising housing costs and other bills.

“For people in these lower paid occupations, it’s less appealing,” said Nick Bunker, an economist at Indeed Hire Lab. “There are fewer opportunities.”

UNEQUAL GROWTH

Cities with “sluggish economies” tended to have weaker wage gains for all workers, but also lower levels of inequality than larger cities, the researchers found.

This is especially true in cities where the main industries are struggling financially, like Detroit, where automation and auto plant closures have led to job losses.

While areas such as the thriving tech sector in the San Francisco-San Jose region have moved up the rankings, some cities with the most or least inequality in 1980 were still marked by extremes 35 years later.

Fairfield, Connecticut, about 50 miles northeast of New York City and home to General Electric’s headquarters from the 1970s until 2016, had the starkest wage gap between rich and poor in both 1980 and in 2015.

The disparity, however, has become more dramatic. In 1980, a Fairfield resident with earnings in the top 10% made nearly six times as much as a neighbor in the bottom 10%. By 2015, those on the high end earned nine times as much.

Bakersfield and Santa Cruz in California also had persistently high levels of inequality, the report found.

At the other end of the spectrum, cities such as Erie, Pennsylvania, Utica-Rome, New York, and Sheboygan, Wisconsin, had some of the lowest levels of inequality.

Lower wage workers have less leverage than they did in previous generations because unions are weaker now, said Josh Bivens, research director for the Economic Policy Institute. Long periods of high unemployment have also limited workers’ ability to push for better pay, he said.

“In the last 30 years, lots of those things that provided wage growth for low- and moderate-wage workers have been stripped away,” Bivens said.

Recent trends in the labor market may provide some relief,he said. Some states and cities have approved minimum wage increases in the past couple of years, while a tight labor market has also helped to create better opportunities for some low and middle wage workers.

But those improvements are likely not enough to close the gap, Bivens said.

(Reporting by Jonnelle Marte; Editing by Heather Timmons and Richard Pullin)

Murders in Mexico surge to record in first half of 2019

FILE PHOTO: People stand near bullet casings on the ground at a crime scene after a shootout in the municipality of Tuzamapan, in the Mexican state of Veracruz, Mexico, May 16, 2019. REUTERS/Yahir Ceballos/File Photo

MEXICO CITY (Reuters) – Murders in Mexico jumped in the first half of the year to the highest on record, according to official data, underscoring the vast challenges President Andres Manuel Lopez Obrador faces in reducing violence in the cartel-ravaged country.

There were 14,603 murders from January to June, versus the 13,985 homicides registered in the first six months of 2018, according to data posted over the weekend on the website of Mexico’s national public security office.

Mexico is on course to surpass the 29,111 murders of last year, an all-time high.

For years Mexico has struggled with violence as consecutive governments battled brutal drug cartels, often by taking out their leaders. That has resulted in the fragmentation of gangs and increasingly vicious internecine fighting.

Veteran leftist Lopez Obrador, who took office in December, has blamed the economic policies of previous administrations for exacerbating the violence and said his government was targeting the issue by rooting out corruption and inequality in Mexico.

“Social policies are very important – we agree they’ll have positive effects. But these positive effects will be seen in the long term,” said Francisco Rivas, director of the National Citizen Observatory, a civil group that monitors justice and security in Mexico.

The complexity of fighting criminal groups is a major test for Lopez Obrador’s young administration, which has vowed to try a different approach than that of his predecessor.

His administration last month launched a new militarized National Guard police force tasked with helping to fix the problem.

(Reporting by Anthony Esposito; Additional reporting by Rebekah F Ward; Editing by Dan Grebler)

Mexico leftist vows no tolerance on corruption after historic win

By Dave Graham

MEXICO CITY (Reuters) – Mexico’s new president Andres Manuel Lopez Obrador said he would pursue friend and foe alike in a crackdown on corruption after voters handed him a powerful mandate for government with a landslide election victory on Sunday.

Lopez Obrador, the first leftist president since the end of one-party rule in 2000, won between 53 and 53.8 percent of votes, according to a quick count by the electoral authority, more than double the total for his nearest rival.

That would be the biggest share of the vote since the early 1980s, and would give Lopez Obrador a strong platform both to address Mexico’s internal problems and face external challenges like the threat of a trade war with the United States.

Going into Monday it was unclear whether Lopez Obrador had done enough to secure the first outright majority in Congress in over 20 years, with pollsters’ early estimates suggesting he was close in the lower house but farther away in the Senate.

Speaking to reporters after his win, Lopez Obrador identified corruption as the “principal cause” of inequality and the criminal violence that has bedeviled Mexico for years, and said he would spare no one in his commitment to root it out.

“Whoever it is will be punished, I include comrades, officials, friends and family members,” the 64-year-old said. “A good judge begins at home.”

The election was a crushing defeat for the ruling centrist Institutional Revolutionary Party, or PRI, which governed Mexico from 1929-2000 continually and again from 2012.

Public anger over corruption scandals, which have shattered the PRI’s credibility, was a defining feature of the campaign, alongside nationwide discontent over soaring levels of violence and years of lackluster economic growth.

Lopez Obrador, a former Mexico City mayor, was greeted with rapturous cheers by supporters in the capital’s Zocalo central square around midnight, while friends celebrated in his tiny hometown of Tepetitan, in the poor southern state of Tabasco.

The victory was a vindication for Lopez Obrador, who was written off by many critics after narrowly failing to capture the presidency at his first bid in 2006.

Then, he cried fraud and declared himself the rightful winner, but alienated many supporters with huge street protests that brought much of the capital to a standstill for weeks.

He also began campaigning relentlessly around Mexico with the message that he alone could fix the country’s problems, calling out his opponents as corrupt and inept.

Finishing second again in 2012, he remained the most visible opposition leader and by this year had become the focal point of public frustration with the establishment’s shortcomings.

Once results showed his margin of victory on Sunday, and mindful of accusations that his instincts cleave toward authoritarianism, Lopez Obrador quickly sought to calm nerves about his presidency. He pledged to pursue responsible economic policies, respect private property and guarantee individual liberties.

And he paid tribute to the role in the campaign played by outgoing President Enrique Pena Nieto and the media, both of which have felt the bite of his scorn in the past.

Mexican presidents are limited by law to a single term.

Lopez Obrador will take office in December facing a U.S. government that has been openly antagonistic to Mexico over trade and migration under President Donald Trump.

The newly elected president has said he wants to make Mexico more economically independent of the United States. At the same time, he also hopes to persuade Trump to help develop Mexico and Central America in order to contain illegal migration.

Andrew Selee, president of the Migration Policy Institute in Washington, saw a change from past Mexican leaders who were “obsessed” about being on good terms with the United States

“It means that the U.S. can’t take Mexico for granted any more,” he said. “Lopez Obrador will be pragmatic … but he’s not going to bend over backwards to have a good relationship.”

(Reporting by Dave Graham; Additional reporting by Julia Love, Christine Murray, Anthony Esposito, Berengere Sim and Delphine Schrank; Editing by Frank Jack Daniel and Catherine Evans)

CEO’s get 335 times what average worker makes

The Empire State Building's spire is shrouded in clouds in Manhattan, New York, U.S., May 3, 2016.

By Ross Kerber

BOSTON (Reuters) – Chief executive officers of S&P 500 companies on average made 335 times more money than the average rank-and-file worker last year, down from a multiple of 373 in 2014, according to a union study released on Tuesday.

The figures released annually by the AFL-CIO, the largest U.S. federation of labor unions, are likely to gain attention. Pay disparities, which have persisted despite a steady American economy that has reduced the joblessness rate to around 5 percent and raised wages somewhat, have fueled political debate.

The average production and non-supervisory worker made around $36,900 last year, up from roughly $36,000 in 2014, according to a statement from the AFL-CIO.

Meanwhile the average CEO of an S&P 500 company made $12.4 million last year, down from $13.5 million in 2014. An AFL-CIO spokeswoman said the lower average CEO compensation figure reflected how for many the present value of future pension benefits declined.

Union leaders said the figures showed how pay decisions do not favor the average worker. “The income inequality that exists in this country is a disgrace,” AFL-CIO President Richard Trumka said in a statement. “We must stop Wall Street CEOs from continuing to profit on the backs of working people.”

The high levels of executive pay have drawn criticism from both Democrat Hillary Clinton and Republican Donald Trump in the current U.S. presidential campaign.

Nonetheless, top shareholders have overwhelmingly supported management on executive compensation decisions, according to the advisory “say on pay” votes most public companies hold annually.

Starting in 2017, the U.S. Securities and Exchange Commission will require public companies to disclose the ratio of the pay of their CEO to the median compensation of their employees.

(Reporting by Ross Kerber; Editing by Lisa Von Ahn)

Global Wealth inequality is becoming a risk

A general view of the low-income neighborhood known as Boca la Caja next to the business district in Panama City

OXFORD, England (Thomson Reuters Foundation) – Growing global wealth inequality is becoming a fundamental risk to democracy and to economies around the world as more people feel government rules “rigged” in favor of the rich leave them with few options, investors and governance experts said Friday.

“It’s very dangerous,” said Ngaire Woods, dean of the Blavatnik School of Government at the University of Oxford. “If people can’t aspire to succeed within the system, they will aspire … outside the system, in ways that break the system.”

That frustration is feeding into everything from the contentious U.S. presidential race to growing dissatisfaction over the amount of aid money that lands in the hands of rich-nation consultants rather than reaching the poor, experts said at the Skoll World Forum on Social Entrepreneurship in Oxford.

In the United States, for example, “trickle down” economic policies that support tax cuts for the rich with the aim of boosting economic growth and jobs have led to a $2 trillion annual redistribution of wealth from the bottom 99 percent of earners to the top 1 percent over the last 30 years, said Nick Hanauer, a former venture capitalist and now head of Civic Ventures, which aims to drive social change.

If the trend continues, by 2030, the top 1 percent of Americans will earn 37 to 40 percent of the country’s income, with the bottom 50 percent getting just 6 percent, he said.

“That’s not a capitalist market economy anymore,” he warned. “That’s a feudalist system and it scares … me.”

Globally, half of the world’s wealth is now held by just 1 percent of the world’s population, according to a 2015 report by Credit Suisse, a financial services company.

That trend toward greater inequality – driven in part by tax policies and shifts such as the growing power of corporate lobbyists in the United States – is leading to the increasing belief that political systems can no longer deliver results for many people, said Darren Walker, president of the U.S.-based Ford Foundation.

Many people feel that “the political apparatus of democracy is corrupted” and the result is “dissatisfaction by huge swathes of the population about the potential of democracy to deliver anything of value and meaning to their lives,” he said.

SUITCASE OF MONEY

It is also putting the United States in an odd spot when it comes to enforcing anti-corruption rules overseas, including in the aid business, he said.

U.S. aid groups ask, “Can we really trust Africans to spend this money in the way Congress has appropriated?” Walker said. “People say, ‘Poor you, you have to bring a suitcase of money when doing things in Africa.'”

“But we have the same thing in the United States – but you don’t have to bring a suitcase. You bring a check. And you get the same effect. You give it to the officials’ fundraiser and say, ‘By the way, I need you to do this for me,'” he said.

“It’s no different (except) it’s legal,” he added. “We need to (see) our own culpability in this inequality.”

Aid agencies and social enterprises – businesses that strive for social good as well as profits – also are part of the problem when huge sums of money they spend on bringing people out of poverty in poor countries end up in the pockets of rich-world consultants, the experts said.

Donors “make a lot of fuss holding us to account on the money we get,” Woods recalled a frustrated representative of an Indonesian organization saying. “But for every dollar we get, 80 cents stays in the beltway (around Washington DC),” she said.

Many organizations – including USAID – are now trying to improve that percentage, delegates at the Skoll Forum said. But progress in helping aid recipient countries build their own systems to take care of their own problems has been slow.

BUILDING CAPACITY

The goal of giving “capacity building grants”, Walker said, should be to make sure “you don’t need to go back to Africa. So there is a rich, robust civil society there. That’s the vision, and we’re a long way from it.”

Investing more in civil society groups in poor countries, rather than just U.N. organizations, is one way of bringing change, said Degan Ali, the executive director of Adeso, a local charity working in Somalia and the Horn of Africa.

Reversing growing inequality will depend largely on revamping government policies and making rules fairer, changes that often need to be driven by public pressure, panelists said.

Those might include everything from ensuring that civil servants don’t change with each election to eliminating private schools to drive funding into improving state-run schools, the panelists and audience members said.

Woods noted that her own university education in New Zealand was funded by taxes. “That opportunity is one we’re all agreed is open to far too few people today. We have to think about why,” she said.

(Reporting by Laurie Goering; editing by Ros Russell:; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate)